Bamboozled February 25, 2019: If you’re divorced, here’s how to get Social Security benefits on your ex’s record

If you’re facing a divorce, there are lots of financial issues you’ll need to unravel.

One of them is Social Security.

To qualify for benefits, you must have earned 40 work credits. That’s the same as a 10-year work history.

If you haven’t earned enough credits, you may be eligible for benefits based on your ex-spouse’s record. And even if you’ve earned enough credits but your ex had a higher income than you, you may be able to claim a larger benefit based on your ex’s record.

Here’s how it all works.

The basic rule

If you are divorced, but your marriage lasted 10 years or longer, you can receive benefits on your ex-spouse’s record if all of the following apply:

You are unmarried;

You are age 62 or older;

Your ex-spouse is entitled to Social Security retirement or disability benefits;

The benefit you are entitled to receive based on your own work record is less than the benefit you would receive based on your ex-spouse’s work record.

This rule stands even if your ex has remarried.

Let’s use Jane as an example.

“Jane has been married for more than 10 years, so she would just need to remain unmarried after her divorce, and wait until she turns 62 and her ex-spouse becomes eligible for benefits on his own record,” said Michael Green, a certified financial planner with Wechter Feldman Wealth Management in Parsippany.

How much will my benefit be?

The exact numbers will depend on exactly what your ex has earned.

The divorced spouse will receive a benefit equal to one-half of the ex-spouse’s full retirement benefit (FRA) amount as long as the ex has collected benefits at his or her full retirement age, said Jody D’Agostini, a certified financial planner with AXA Advisors/The Falcon Financial Group in Morristown.

She said if the higher earner starts to collect benefits before full retirement age, which depending upon your birth year is between ages 65 and 67, then the ex-spouse would receive one-half that amount, she said.

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But you have to consider your own benefits, too.

“If the benefit is greater than the spousal benefit, then the higher payout will be realized,” she said. “If you are eligible for both retirement benefits on your own record and your divorced spouse’s benefits, Social Security will pay out the retirement benefit first, and you will receive an additional amount on your ex-spouse’s record so long as the combination is higher.”

Let’s come back to Jane.

“If Jane’s ex would get $1,500 in benefits at full retirement age, her maximum spousal benefit would be $750,” Green said.

If Jane’s own benefit is $500 a month, she’d get an extra $250 spousal benefit. So in the end, it adds up to the higher amount.

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What happens if you remarry?

If you remarry, you can’t collect benefits on your former spouse’s record unless your later marriage ends, whether by death, divorce or annulment, Green said.

Back to Jane.

Let’s say Jane was married to Jack for 15 years, but later married Bill.

If Jane and Bill were to divorce after 10 years, Jane could collect on either ex’s record, Green said. She would receive the higher benefit of the two.

Should I wait before taking benefits?

Let’s talk about your own benefits first.

It is generally a good idea to hold off as long as possible, up until age 70, before you start to collect benefits, D’Agostini said.

That’s because each year that you hold off claiming between ages 62 and 70, your benefit will increase by 7 to 8 percent annually.

“The highest spousal benefit is one-half the full retirement amount,” D’Agostini said. “The only time that you would move up is if your ex-spouse dies. Then you would move up to the full benefit that he or she was collecting.”

Restricted applications

If you’re born before Jan. 1, 1954, you can file what’s known as a “restricted application,” something that’s not available anymore for younger taxpayers.

Under the restricted application, when you apply for benefits, Social Security will allow you to file for spousal benefits only. But if you were born after Jan. 1, 1954, even if you are full retirement age or older, you are deemed to have filed for all possible benefits when you apply for Social Security.

So if your own benefit is higher, you can’t choose the spousal benefit so your own benefit can grow.

But if you are old enough to be eligible to file a restricted application, at full retirement age, each ex-spouse can file for spousal benefits on the other ex-spouse’s record, Green said.

“Both ex-spouses can then accrue delayed retirement credits on their own benefits,” he said. “In Jane’s example, she can claim spousal benefits on her ex-spouse’s record at 62, while letting her own benefits grow until age 70—when Jane can switch to her boosted benefit on her own record.”

What if my ex hasn’t started taking benefits yet?

Green said many divorced spouses mistakenly think that their ex-spouse must be collecting Social Security before divorced spousal benefits can be paid.

That’s not the case.

As long as both individuals are at least age 62, and the ex-spouse can qualify for spousal benefits, the benefits can be taken, Green said.

“There is one caveat,” Green said. “If Jane’s ex-husband hasn’t applied for his benefits yet, Jane can only receive benefits if they have been divorced for at least two years.”

Also remember that if you start taking benefits at age 62, you will have a permanently reduced benefit, D’Agostini said.

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What if my ex died before taking benefits?

As long as you are not currently married, and if your ex has earned enough credits to have a benefit, you will be able to claim based on your ex’s work history even if your ex died before taking benefits, D’Agostini said.

If the deceased passed away before full retirement age, you’re entitled to a benefit based on the deceased’s retirement benefit at full retirement age, she said.

“If the deceased passed away at or after full retirement age, then the benefit is based on the deceased’s retirement benefit at FRA plus any credits,” she said.

Remember you would have had to be married for 10 years.

Let’s look at Joe, who was married to Mary for 15 years. They divorce, and sometime later, Mary dies.

As long as Joe is 60 years old, or 50 if he’s disabled, he could still receive benefits on his deceased ex’s record, Green said.

What if my ex collected benefits and then died?

Your benefit could change.

Green said when a Social Security beneficiary dies, his or her surviving spouse is eligible for survivor benefits.

“A surviving spouse can collect 100 percent of the late spouse’s benefit if the survivor has reached full retirement age, but the amount will be lower if the deceased spouse claimed benefits before he or she reached full retirement age,” he said.

If you were already receiving spousal benefits on the deceased’s work record, Social Security will in most cases switch you automatically to survivor benefits when the death is reported, Green said.

In most cases, a widow or widower qualifies for survivor benefits if he or she is at least 60 and had been married to the deceased for at least nine months at the time of death.

Green said there are a few exceptions to those requirements:

If the late beneficiary’s death was accidental or occurred in the line of U.S. military duty, there’s no length-of-marriage requirement.

You can apply for survivor benefits as early as age 50 if you are disabled and the disability occurred within seven years of your spouse’s death.

If you are caring for children from the marriage who are under 16 or disabled, you can apply at any age.

My ex gets a government pension. Can I still collect on my ex’s record?

Yes, but your ex’s Social Security benefit would be offset.

Green offered an example.

Let’s say Jim’s ex-wife Sue is projected to receive a monthly Social Security benefit of $2,000, but also has a government pension of $600 per month. In this case, Sue’s Social Security benefit would be offset by two-thirds of the pension amount, or $400. Therefore, Sue’s net benefit would be $1,600 ($2,000 – $400), and Jim would be entitled to 50 percent of this amount, or $800 per month.

Rules for multiple ex-spouses

Let’s say you were married twice, and both of your exes died. You can’t collect benefits on both ex-spouses.

The benefit you’d receive would be the higher of the two, D’Agostini said.

“If the ex passed away before full retirement age, then the widower benefit would be based on the retirement benefit at FRA,” she said. “If the ex passed away at or after full retirement age, then the widower benefit would be based on the deceased’s retirement benefit at FRA plus any credits.”

Also note that if someone has been married several times, each ex-spouse may be able to collect on that person’s record.

For example, if someone has three ex-spouses, all three can claim benefits as long as the marriages lasted at least 10 years and the ex-spouses don’t remarry.

Avoid these mistakes

Because Social Security’s rules are strict and very specific, if you’re planning for a divorce, you should be proactive.

Green recommends if you’re close to reaching 10 years of marriage, you shouldn’t hurry to finalize your divorce.

You need to reach that tenth anniversary to be eligible for spousal benefits.

D’Agostini said she’s seeing more “gray divorces,” or divorces that are happening after the age of 50.

She said Social Security is not transferable, assignable or subject to garnishment. It’s guaranteed income that cannot be outlived, so it needs to be planned for carefully.

“The biggest mistake I see is that individuals claim as soon as they can at age 62,” she said. “If you claim at 62, you will only receive 75 percent of the benefit that you would have at full retirement age.”

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She said if you hold off until age 70, you’ll get the largest possible benefit – you will receive 8 percent more per year for every year you don’t collect.

“If your full retirement age was age 66, then that’s an increase of 32 percent, and if it’s age 67, then it’s a 24 percent increase,” she said. “With Social Security cost-of-living increases being very low – 2.2 percent for 2018 – then it would be a wise move to start this guaranteed stream of income at a higher point.”

Mistakes can be costly, so we recommend you meet with a financial advisor before taking benefits.

We’re also happy to take your questions on this, but because so much depends on your specific Social Security record, we recommend you call the agency at (800) 772-1213 or make an appointment at a local office here.